The Town of Innisfil will have less say in the overall sustainability of the Orbit project.
Council decided to recuse itself from operating a district energy system (DES) for the Orbit and instead work to connect developers with interested private parties with the financial and technical resources to develop and operate the system, free from public ownership.
The option was one of four presented by staff at the Feb. 28 council meeting, and the one it recommended in its report. After nearly an hour of discussion on the matter, council voted to agree with staff.
Since the vision for the Orbit first came before council in 2019, a DES has been seen as one way to achieve the sustainability targets set out. In 2021, council got its first look at what a DES could be for the Orbit, providing low-carbon heating and cooling to the buildings that will make up the transformative development south of Alcona.
These systems, also known as thermal grids, supply heating and cooling to multiple buildings in dense communities. The staff report to council outlined, a DES takes heat from a centralized source — or several different but interconnected sources — and distributes it to the buildings through buried, insulated pipes.
Most DES initiatives have been fuelled by natural gas, but innovations allow the systems to utilize different fuel sources, such as surplus heat from local industry and other renewable resources. The DES for the Orbit could utilize the spent resources from the Lakeshore Wastewater Treatment Plant, being backed up by natural gas condensing boilers, keeping the project low carbon.
But low carbon comes at a high cost. The town retained FVB Energy for a pre-feasibility study to determine if the DES would be viable for the Orbit. The study, completed in 2020, suggested a $70-million price tag to create a DES for Phase 1A of the Orbit, encompassing approximately 144,000 square metres, including the proposed GO Transit station.
Revised numbers from 2023, which include phases 1A, 1B and 2, have a capital cost of nearly $140 million. Estimates indicate a return on investment would be seen around 2046.
Such a figure made the first model of ownership — entirely public — a non-starter. While it may have worked in Markham — built over decades, and with the support of IBM, one of the largest impacted employers utilizing the DES — it wouldn’t work for Innisfil.
So council’s discussion focused on a potential public-private partnership (Option 2 provided by staff) and private ownership (Option 3, recommended by staff and eventually adopted).
The public-private partnership could still be a significant financial burden on the town, at least at the outset, but it would allow Innisfil “to maintain some control while also levering significant private sector financial investment and expertise,” staff reported. The private option took that control away as “municipal control is limited to non-existent in this model. This model is common where there is a high rate of return and little need for public sector support.”
With Option 2, the town becomes a partner, planning and growth director Andria Leigh told councillors; with Option 3, it becomes a matchmaker.
Deputy Mayor Kenneth Fowler put the idea of Option 2 on the floor. Coun. Alex Waters immediately threw his support behind it as he saw Option 3 as putting “a nail in the coffin” for a DES.
“One of the most important aspects of the Orbit was having a district heating system which would dramatically reduce carbon emissions,” Waters said.
He was concerned that correspondence from the Cortel Group, the developers of the Orbit, indicated its reluctance to partner on a DES. It would be difficult, he said, for a private business to negotiate with another private business that wants nothing to do with the process.
“We need to be in the mix in order to move this whole thing forward,” Waters added.
The environmental impact of a DES could be substantial. Staff indicated the potential DES “could result in up to 91 per cent savings in greenhouse gas emissions annually from the current status quo.
“This would mean that emissions approximately three times the town’s baseline carbon emissions would be prevented from being produced, on an annual basis, with the implementation of a DES,” the staff report indicated.
Coun. Kevin Eisses was intrigued but concerned such a request would be spreading staff too thin. Leigh and chief administrative officer Oliver Jerschow confirmed Eisses was correct, as confirmation of all the potential financial costs and environmental savings would come through a full business case study on the DES, and council might not have a full understanding of just what that would entail.
“The work involved to seriously and properly explore a partnership here goes well beyond $25,000 of consulting work,” Jerschow said. “It’s not just imagining what a district energy system could be. We are talking about basically creating a new business that needs to invest tens of millions of dollars.”
Waters was the only councillor to vote in opposition to the staff-recommended option.
